Marketing consultant Jay Baer once said that “the end goal is action, not eyeballs.” And he’s right: marketing is pointless without real and actionable results.
But where should a marketer start when it comes to measuring metrics? With so much jargon out there, the easiest way to think of metrics is to group them into four basic types:
Usage metrics: How many people looked at or used your marketing collateral?
Sharing metrics: How often did your audience share your content on their various channels?
Lead generation metrics: Did your target audience convert as a lead via a form, subscription, trial etc.?
Sales metrics: Did your audience put their hand in their pocket to buy what you are selling?
Each of the four top-line metric types also contain multiple metrics. For example, usage metrics might include traffic and bounce rate while sharing metrics could include retweets or forwarding emails.
That said, there are five key performance measures you should be reporting on to highlight the efficiency of your marketing efforts.
1. Marketing sales revenue (sales metric)
To paraphrase Bill Clinton, it’s all about the economy, stupid. Companies fold or flourish based on their cashflow so marketing sales revenue is a hugely important metric when considering the ROI of your marketing tactics.
However, finding your marketing sales revenue isn’t quite as easy as looking at your sales total in Google Analytics. Instead, you need to discount any sales you’ve made that weren’t outright assisted by your marketing efforts.
These sales may have come from legacy clients who were already in the pipeline or from someone who wandered into a physical store with no prior knowledge of the company.
Remove these non-marketing qualified sales and you’ll get the results for your marketing sales revenue. Of course, if you have a digital marketing dashboard it’s even easier!
2. Cost per lead (lead generation metric)
If it’s relevant to your marketing strategy, it can be useful to separate the percentage of your business that comes from inbound and outbound marketing.
Successful marketing should never be carried out in silos and all marketing tactics should work in tandem, but when you’re working on your marketing budget, figuring out what works is an important cornerstone to the success of your company.
When it comes to inbound marketing, your main costs are labour (hours it takes to create the content and campaigns) and technology (whether you have digital marketing software, dashboards or specialised technical gear like cameras or filming equipment).
With outbound marketing, you have all the same costs as inbound plus the costs of buying advertising space in the media you advertise in.
Find your cost per lead by gathering your lead numbers and dividing it by the cost. Once you’ve figured out your cost per lead, you can use the data to inform your overall budget.
3. ROI (sales metric)
ROI is the single most important metric to gauge how well your marketing is performing. ROI is calculated by taking your new sales for a year, deducting your marketing costs, and then dividing sales by that marketing cost.
Put simply, let’s say your company earned €250,000 in new business in the last 12 months. Let’s also assume that you spent €50,000 to generate that new business.
Then the formula is 250,000 - 50,000 = 200,000. 200,000/50,000 = 4
So for every €1 you put into your marketing, you get a €4 return. Or, to put it into hard figures, that’s an ROI of 400%.
Obviously, these are fantastic figures – but more importantly, you can use them to dig into your analytics to determine the avenue that has the best independent ROI.
For example, if you are seeing an ROI of 200% from Facebook but only 25% from Google Ads, you can consider increasing the spend on Facebook to generate higher overall returns for your business.
4. Organic traffic (usage metric)
The holy grail for any business using inbound marketing is to have the majority of your new visitors coming to you via organic search. Inbound is all about pulling people to you by smart marketing – so you don’t have to waste extra resources chasing them.
Increasing your organic traffic involves many factors – but the most relevant are your SEO strategy and your content. Getting these right could result in many more leads coming in.
Though no silver bullet exists to pull in more traffic, James Norquay of Moz offers sound advice: “monitor everything and continue doing high-quality work!”
5. Landing page conversion rate (usage and sales metric)
You can throw all the budget you have into lead acquisition but it won’t mean anything if your landing pages are failing to convert. All the traffic in the world can’t help a business with a dismal conversion rate.
Entrepreneur magazine said that “it’s the landing page that’s going to make or break your campaign” – and that’s advice that makes a lot of sense for any business, but especially for those in the digital realm.
A landing page with a low conversion rate is a sign that something is wrong. Keep in mind that the main job of your landing page is to convert your visitors into leads in exchange for something – be it an email address, a phone number, or your business contact details.
A multitude of studies have been carried out on landing page optimisation, but we suggest starting with this brilliant ebook from Unbounce, a specialist in the field.
Your landing pages and their calls-to-action are a vital part of any business, so neglect them and anticipate a dramatic drop in your profits – and no marketer wants that!
Are you looking to streamline your marketing reporting?
Speaking of effective calls-to-action… We can help you interpret the data you have in a way that helps you see the wood from the trees.
Get in touch today to see how we can help you increase the ROI of your marketing efforts. No hard sell, just a chat so we can help you out. Free free to check out our solutions for digital marketers too.